Why Thinking Like A Tenant Pays Off

As a landlord you often have to think carefully about your property. There are monthly costs to consider, maintenance issues to budget for and mortgages to cover just to start with.

Throw on dealing with tenants, potentially property managers, keeping neighbors happy and the list gets longer and longer. You simply think differently when you’re a landlord and the property is a huge investment you need to manage, maintain and care for.

Yet one aspect we often overlook is thinking like a tenant at times, rather than constantly wearing our owner’s hat.

What Would Your Tenant Think?

As an owner your costs seem to continue to grow. Taxes increase, utility costs increase, legal fees increase, everything seems to be increasing, all at your expense.

One way to combat this is to pass these costs onto your tenants by raising rents. Now, I covered how to go about this in a previous article (Raising Your Rents Without raising The Roof), but the important part about it that I didn’t talk enough about is to think like your tenant!

If you just show up minutes before the cut off of when you can legally raise the rent and throw a rent increase notice in your tenants face you could be setting yourself up for trouble. Just imagine how you feel when you suddenly see a huge increase in fees from your bank or a large jump in your taxes.

It’s the same for the tenants. All they see is a money grubbing landlord looking out for themselves and jacking up there rent for no fair reason. They don’t see the three years prior where you couldn’t or didn’t raise the rents, they don’t see the vacant months that you covered right out of your pocket, they simply see a big fat increase that affects them.

In the previous article, I talked about positioning and explaining why you’re increasing the rents to help soften the blow. But part of the explanation I didn’t cover was planning further ahead.

Don’t React, Lead The Market

You’re running your landlording like a business. You know that costs increase over time and you know that your tenants rent will be going up, even if it’s just $25 or $50, in six months, so why not let them know there will be an increase way in advance?

You don’t have to specify how much, just that you’ve been reviewing some of the costs and local rents and expect there will be a small increase in the future. Again, you value them as tenants, so you’re going to do something that is fair to both of you, so make sure they are aware.

Now, rather than reacting last minute you are leading them and you can make a decision that works for potentially both of you. If you see that your costs haven’t really increased and the tenants are fabulous, you may come back to them in another couple of months and let them know upon re-examination you’re going to hold off on any increase this year.

Or you may simply go in with a small $25 increase to cover minor increases that you’re having to cover for anything from taxes, to bank fees to insurance. Or, if the market has skyrocketed you may need to consider increasing rents by much more so as to not miss out.

However it plays out, you’ve forewarned the tenants in advance so they aren’t completely blindsided.  Now, rather than being upset, they typically appreciate the advance warning and can make plans to either move on, allowing you to put people in at the higher rate, or to prepare to absorb the additional costs.

Expanding on this you can also start including tenants on longer range plans.

Preparing For The Future.

Sometimes you know you have work coming up in the future on your property, so why not include the tenants in the updates?

Whether it’s a new roof, a new driveway or even a new fence, let the tenants know the proposed plan. If you’ve started to plan to get the roof done in the spring or the rotting deck upgraded before summer, give the tenants advance warning and let them know so they can prepare.

Once you talk with them who know what else you can discover. Maybe they are going to be away on vacation for a week and you can coordinate your project to take place while they are gone?

Now it’s very little inconvenience for them and they are rewarded with a new roof ,deck or some property improvement that makes their enjoyment of the property better upon their return.

If you start working with your tenants and thinking about what makes them happy and perhaps a little more prepared for you, it starts getting easier to keep them longer all while keeping them happy.

It’s a win win for everyone! Are you already thinking like a tenant? Or do you simply leave your landlord cap on and push forward upsetting tenants and replacing them every year? Tell me how you prepare for the future!